Policy and Politics in the EU/EMU and China ‐Some Neglected Aspects

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Professor Hubert Fromlet Linnaeus University / Sweden

Summary:

Policy and Politics in the EU/EMU and China ‐ Some Neglected Aspects

Presentation at the International Conference of the GIC (Global Interdependence Center, Philadelphia) in Milan/Italy, May 15‐17, 2013 The current growth problems of the EU/EMU and China’s important role in keeping global growth roughly on the expected track frequently top the headlines. On the other hand: we are not sufficiently informed about, for example, the problems of the Chinese financial system and total government debt. Thus, markets neglect this important issue. We know, however, quite a lot about this kind of problem when it comes to Europe. In this presentation I would like to focus on a number of phenomena that are or may become important in the foreseeable future ‐ but which so far have not received the necessary attention when it comes to major economic/financial analysis.

EU / EMU: ¤ Changes in the political landscape ‐ the end of solidarity? One of the main problems of the EU/EMU is the lack of visions for the future. National interests dominate. “Free riders” like Sweden behave to a great extent like outsiders, fearing public skepticism and future punishment in general elections. The same pattern can be observed in other countries. Solidarity and common visions/objectives are more or less gone. This whole phenomenon raises the question of policy sequencing. Does the EU/EMU first need political leaders who create the strategic model for the political future of Europe? Or should it be the other way around, i.e. solving the most acute problems and then getting back to the remaining long‐term issues in a couple of years? An optimizing combination of both approaches seems to be impossible any time soon since the gap of interest between “the north” and “the south” of the EU/EMU area remains too wide.


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